Peak Oil

Falling Interest Rates Have Postponed “Peak Oil”

13 Jun 2017   Peak Oil

Falling interest rates have huge power. My background is as an actuary, so I am very much aware of the great power of interest rates. But a lot of people are not aware of this power, including, I suspect, some of the people making today’s decisions to raise interest rates. Similar people want to sell securities now being held by the Federal Reserve and by other central banks. This would further ramp up interest rates. With high interest rates, practically nothing that is bought using credit is affordable. This is frightening. Another group of people who don’t understand the power of interest rates is the group of people who put together the Peak Oil story. In my opinion, the story of finite resources, including oil, is true. But the way the problem manifests itself is quite different from what Peak Oilers have imagined because the economy is far more […]

Peak Oil Demand Is A Risk – Why Nobody Knows If Or When

1 Jun 2017   Peak Oil

The lead story in a recent The Wall Street Journal Report on Innovations In Energy was titled “Get Ready for Peak Oil Demand.” We have been getting ready for the past couple of years. However, in dealing with such a critical issue overhanging the future of this important global industry, the unanswered question is when will oil demand peak and begin to decline. To answer the question one needs to know when those forces reducing oil consumption will become meaningful. Then, one has to know how much the demand will be reduced. The assumptions underlying some of the most pessimistic forecasts for oil consumption treat demand-altering forces as switch-like – once thrown, oil use goes from light to dark, hot to cold, or rising to collapsing. It has a nearly immediate impact. However, it may be more appropriate to view the transition from expanding energy use to shrinking consumption […]

This Is What the Demise of Oil Looks Like

31 May 2017   Peak Oil

From giant companies like Exxon Mobil Corp. to OPEC members such as Saudi Arabia, oil producers say their industry will enjoy decades of growth as they feed the energy needs of the world’s expanding middle classes. But what if they’re wrong? There’s a host of reasons to think they might be. Here’s what happens when you test their central assumptions. The International Energy Agency sees oil demand rising more than 10 percent, to 103.5 million barrels a day by 2040, while companies predict even faster growth. But forecasters don’t always anticipate seismic shifts in technology and policy that could slow demand growth, or even eliminate it altogether in some parts of the economy. Even small changes could add up. Advances in vehicle efficiency, a rise in electric cars, tighter emissions standards and shifts to other fuel sources would result in oil demand much lower than the industry is banking […]

Get Ready for Peak Oil Demand

29 May 2017   Peak Oil

The world’s largest oil companies are girding for the biggest shift in energy consumption since the Industrial Revolution: After decades of growth, global demand for oil is poised to peak and fall in the coming years. New technologies that improve fuel efficiency are starting to push down the amount of gasoline and diesel that’s needed for transportation, and a consensus is growing that fuel demand for passenger cars could fall as carbon rules go into effect, electric vehicles gain traction and the internal combustion engine gets re-engineered to be dramatically more efficient. Western countries’ growth used to move in lockstep with their energy consumption, but that phenomenon is starting to decouple in advanced economies. While most big oil companies foresee a day when the world will need less crude, timing when that peak in oil demand will materialize is one of the hottest flashpoints for controversy within the industry. […]

Saudi Aramco CEO Says Peak Oil Demand Is a Misleading Theory

Petroleum use will keep growing for decades to come: Nasser World’s largest producer remains on track for IPO next year The boss of Saudi Arabia’s state oil company defended petroleum as the mainstay of the global economy, countering theories that demand will peak within years with his own forecast that consumption will keep growing for decades. “The global economy is forecast to double in size by 2050” so overall demand for energy will be higher, Saudi Arabian Oil Co. Chief Executive Officer Amin Nasser said at the International Oil Summit in Paris. The idea that oil demand is close to its maximum level is “equally as misleading” as now-discredited theories about peak oil supply, he said. Amin Nasser in Paris on April 27. His comments contradict recent opinions from some of the world’s largest oil companies. The surge in battery-powered vehicles will cause demand for oil-based fuels to peak […]

Oil Thesis For 2017 – International Production

15 Apr 2017   Peak Oil

Summary Recent data on international rig counts continue to show little increase into 2017. We anticipate oil production from non-OPEC, non-US production sources to decline in 2017 as depletion and decline rates take their toll; We differ from IEA’s interpretation of the trend line for non-OPEC, non-US production in H2 2017. This is our third and final article updating our oil thesis for 2017. Our prior articles addressed sentiment and fundamentals , and here, we’ll discuss international rig counts and what the low number of rigs portend for oil production. As always, we like to use our kids’ affinity for desserts to explain an oil concept, and kids are a bit of an expert when it comes to understanding decline and depletion rates. So, let’s use my daughter for instance. Like any oil producer with a new oil field, whenever my daughter gets a big bowl of ice cream, […]

Plentiful supply can meet strong demand, but forecasts rarely certain, admits BP exec

8 Apr 2017   Peak Oil

Gone forever are the days when the world stressed over what would happen when humanity began running out of oil—a fear based on M. King Hubbert’s theory of peak oil—or the point in time at which the maximum rate of petroleum extraction occurred. The North American shale revolution proved that not only are there plenty of hydrocarbons left to fuel humans for centuries, there are plenty of people with substantial grit and ingenuity to find ways to reach these resources. What worries the oil industry today is the idea of peak oil demand—when demand growth for oil and gas resources begins to stagnate and lose ground to other energy sources, such as renewables, due to cost and/or environmental concerns. “There could be a time, and it could be as early as 2035, when we start to see peak oil; not what is sometimes discussed by geologists where we start […]

Why Are We Waiting (for Peak Oil)?

6 Apr 2017   Peak Oil

Remember those long holiday road trips where the question endlessly repeated was “are we there yet”? Well, for many in the peak oil community, waiting for it to arrive has evoked a similar feeling, as the predictions of some academics, commentators, and bloggers have failed to materialize punctually. So, it’s worth revisiting some thoughtful papers that reveal a more sophisticated approach to timing the peak date. This may give people a greater appreciation of the challenges of predicting such a complex event. Various mathematical models have been evoked to relate production to estimations of the total amount of oil that can be extracted, also known as the ultimately recoverable resource (URR). These include linear, exponential and, most famously, Hubbert’s logistical model. Attempts have been made to determine the best fit of these models to historical production. However, in terms of prediction, none are necessarily more correct than the others. […]

Peak Oil, a tabletop game about Crisis and Profit

6 Apr 2017   Peak Oil

You are the top manager at one of the big oil companies , tasked with leading your enterprise into a future without oil . With peak oil looming ahead, you try to squeeze the last drops from oil fields around the world to gather the resources to invest into various oil replacement technologies. While you may try to emerge from the coming crisis by regular means, your competitors will most probably not , forcing you to dirty your hands as well. Peak Oil is an eurotrash-style game of worker placement, set collection and push your luck for 2 to 5 players of ages 10 and up . Games last around 45 to 60 minutes. What do the pros say? “ Peak Oil is an interactive game with just the right about of interference. I really dig the game because of the clever action selection mechanism along with the artwork […]

Oil Traders Warn There’s a Supply Crunch Looming

30 Mar 2017   Peak Oil

The oil market is risking a supply crunch as producers cut spending on major projects to focus on short-term low-cost shale output in the U.S., some of the top crude and products traders said. With oil prices hovering around $50 a barrel, current project spending is focused on “short-cycle” projects involving U.S. shale deposits, Daniel Jaeggi, president of Mercuria Energy Group Ltd. , said at the FT Commodities Global Summit in Lausanne, Switzerland, Wednesday. Hedging activity by these same producers is keeping future prices low until 2020, which is dissuading investment in major oil projects, he said. “We are sowing the seeds for potential instability in the future and more volatility, ” Jaeggi said. In three to four years, “you won’t be able to satisfy demand with short-cycle barrels.” After jumping 20 percent in the weeks following the decision by OPEC and 11 allies to curtail output to end […]

There Is No Such Thing As Peak Oil Demand

29 Mar 2017   Peak Oil

Notwithstanding that oil demand has increased for over 150 years, it will eventually stop increasing. If oil demand were to reach an actual peak, then the top might be easier to predict. As it stands, the forecast models of demand are likely predicting peak demand far later than it will be. The so-called balance of supply and demand has always been a moving target, a race to the top in which the two run neck and neck. Imbalances result from out-of-step growth rates and not from movements away from a stationary balance. Perversely, imbalances breed further imbalances as the supply and demand components are provoked in opposite directions but with different timing, magnitudes and inertias. Without sufficient damping, the market has often overcompensated. Of course, there are also exogenous events like political turmoil, policy shifts, technological innovations and demographic changes which can unexpectedly and significantly alter not just the […]

Can Big Oil Survive A CO2 Crackdown?

22 Mar 2017   Peak Oil

Over the long run, the oil business is under threat. There are various arguments about why that might happen. Peak supply people argue we are running out of oil. Peak demanders say that market saturation, efficiency, and new technologies will cause oil demand to peak and decline. Similarly, clean energy proponents argue oil will be undercut by electric vehicles. Another variation of this argument can be found in the “stranded assets” theory, which posits that low oil prices, cheaper alternatives or strict climate regulation – or some combination of the three – will keep vast volumes of unprofitable oil in the ground. A shrinking number of people see oil dominating the energy landscape decades from now. Or, even though it will likely still be a major source of fuel in, say, 2040, its growth is capped. Reasonable people can argue about how much oil will be consumed at what […]

Peak oil? Sooner than you think

21 Mar 2017   Peak Oil

For some time, there has been speculation about when global oil demand may peak – not because we will run out of oil or prices will spike making oil unaffordable, notions that are now considered passé – but because we won’t be needing as much of the stuff as we thought we would. And once the peak is finally reached – whenever that is – demand will begin to drop thereafter, perhaps precipitously. What is radically different about the new thinking about oil demand is that price, while still an important factor, no longer seems as important as it used to be. As further described alternatives to oil are or will soon be cheaper making the price of oil far less significant. Witness the fact that global oil has been growing at much slower clip in the last few years even though prices, hovering in the $40-60 range per […]

Big energy fears peak oil demand is looming

15 Mar 2017   China, Peak Oil

In an attempt to improve the quality of Beijing’s polluted air , the authorities are planning to mandate that every new taxi in the city must be electric or gas-fuelled, China’s National Business Daily reported last month. Beijing’s taxi drivers are no fans of the electric cabs in use there since 2014, complaining about inadequate battery range, alarming performance dips in cold weather and insufficient charging stations. But the thought of the Chinese government taking concerted action to push road transport towards alternative fuels will send chills down the spine of every oil producer worldwide. The prospect of “peak demand” for oil — an end to growth in global consumption — has been discussed in the energy industry for many years, without apparently coming much closer. But some of the world’s leading oil companies now see peak demand and sustained lower crude prices as a risk that they need […]

Peak Oil – Apocalyptic Environmentalism and Libertarian Political Culture

15 Mar 2017   Peak Oil

In 2011, while working toward a Ph.D. in American Studies at the University of Minnesota, Matthew Schneider-Mayerson began a study into the peak oil community. Approaching his subject from the perspective of a social scientist, he conducted his research by way of surveys, interviews, field notes and participant observation (the latter two gleaned through attending the 2009 Association for the Study of Peak Oil and Gas international conference in Denver). His book Peak Oil: Apocalyptic Environmentalism and Libertarian Political Culture is the result of this research. It investigates the ideology and subculture of “peakists,” explores how their movement was influenced by the ascendancy of libertarianism into mainstream American politics and the rise of Internet technology, analyzes peak oil-themed fiction, probes the reasons behind peakists’ political quiescence and discusses the peak oil subculture within the context of […]

Saudi Energy Boss Al-Falih Says Peak Oil Demand Talk Misguided

Saudi Arabia ’s top oil official dismissed the notion that global demand may soon peak and leave billions of barrels of untapped crude stranded in fields that will never be drilled. Khalid Al-Falih, energy minister for the world’s biggest oil-exporting nation, called talk about peak demand among energy executives, analysts and activists “misguided,” and predicted worldwide demand will reach 100 million barrels a day “very soon.” Al-Falih made his remarks Tuesday in a packed-house address at CERAWeek by IHS Markit in Houston, the most influential oil industry conference of the year. Although Al-Falih framed his comments in the wider context of the need to invest in future oil production, his warning comes as the kingdom prepares to sell shares in its state-owned energy giant Saudi Aramco . The Aramco public offering is on track for a 2018 listing, he said. The company and government officials are working on bringing […]

What the Saudi Aramco sale says about the state of the oil industry

As the oil and gas industry gathers in Houston for CERAWeek, a major annual event, geopolitical drivers to oil prices will be a focus. U.S. shale producers will be particularly attuned to backroom discussions about how Saudi Arabia and Russia are viewing new indications of restored momentum in drilling in the U.S. tight oil patch. The bullish reports on U.S. drilling rates come against the backdrop of statements from close advisers to President Donald Trump that the Organization of Petroleum Exporting Countries (OPEC) will make room for U.S. shale. Chances are OPEC will not abandon attempts to shore up the global oil market, regardless of the newfound staying power of U.S. production. That’s because Saudi Arabia has bigger fish to fry when it comes to oil prices. Saudi Arabia’s leaders are betting the farm that the sale of 5 percent of Saudi Aramco, the country’s national oil company (NOC), […]

Should Israel Fear The Peak Oil Crisis?

4 Mar 2017   Israel, Peak Oil

Conventional wisdom suggests that the world economy is in a slow but steady recovery from the 2008 financial crisis. Some economists, however, including Nafeez Ahmed , author of several books including “ A User’s Guide to the Crisis of Civilization: And How to Save It ,” are sounding the alarm about a looming global redux of that crisis rooted in natural resource scarcity, particularly oil. This alarming scenario, outlined by Ahmed in a recent article on Medium titled “Brace for the Oil, Food and Financial Crash of 2018,” foresees in 2018 a terrifying confluence of expensive oil, spiking food prices, a debt-fueled financial crisis, and depressed economic growth, with all of the attendant socio-political tensions we have seen in recent years accelerating. Think Trump, Brexit and the Arab Spring meet stagflation. Could this be bad news for Israel, in its arid, oil-drenched, and politically fragile neighborhood? Let’s consider for […]

Doomsday Scenario: A World Without Oil

3 Mar 2017   Peak Oil

Suppose the rapture happened. Not the kind followed by the Second Coming of Jesus as promised by Paul, but a rapture of oil. Imagine that one night, just after the last parents finish tucking in their toddler after falling into a post-ice cream coma, that … poof! All of the world’s oil in untapped reserves vanished from the Earth into a Great Fossil Fuel Heaven. What remains is just the oil that exists in government or private inventories – extremely limited in quantity. Initially, this would lead to the speedy recovery of oil prices, which have suffered a decline over the past three years due to a massive supply gut. An output reduction deal by the Organization of Petroleum Exporting Countries (OPEC) and a handful of non-members is no match for a disappearing act of biblical proportions. In the United States, employers who require the physical presence of their […]

No Peak Oil For America Or The World

3 Mar 2017   Peak Oil

Oil is more plentiful than you can imagine. And we keep figuring out easier and more economical ways to get it out of the ground. In 1938, the famous geologist M. King Hubbert came up with the concept of peak oil, which is defined as having extracted half of the recoverable, conventional oil reserves. After that, oil production declines and cannot keep up with growing demand as the population continues to rise. We used to think about Peak Oil like this – the reserves are finite, we know where they are and how long they will last, and we will start running out soon. But with recent technological innovations, we keep finding new oil deposits that are now recoverable and a peak won’t happen for a century or more. Source: Association for the Study of Peak Oil & Gas (ASPO) In Hubbert’s time, most of the conventional oil reserves […]

Peak gasoline demand looms with engine efficiency gains

3 Mar 2017   Peak Oil

Demand for gasoline in the United States, which accounts for a tenth of global oil consumption, is expected to peak next year as engines become more efficient, WoodMackenzie analysts said. Global demand for gasoline, which accounts for more than a quarter of the world’s oil consumption, is set to peak as early as 2021 even in the face of relentless growth in the vehicle fleet, according to the Edinburgh-based consultancy. A rise in the number of hybrid and electric cars such as the Nissan ( 7201.T ) Leaf, Toyota ( 7203.T ) Prius and Tesla ( TSLA.O ) as well as tighter fuel standards in Europe and the United States will contribute to a historic shift in consumption. The United States saw spectacular growth in gasoline demand following the collapse […]

Peak oil demand and why it’s basically impossible to predict

21 Feb 2017   Peak Oil

In the past, forecasters had a relatively simple method of estimating whether demand for oil would increase or decrease and by how much. For the most part, they simply looked at the economy. If people were making more money, it was safe to assume they would spend more, travel more and head to the car dealership more often. Now, technologies like electric cars, ride-sharing programs, and autonomous-driving systems are forcing experts to completely rethink their expectations for the future. Their job is becoming a lot more challenging. ‘What you’re seeing is a lot of uncertainty in the transportation sector.’ – Kevin Birn, IHS There’s still a correlation between oil demand and economic activity, but a number of other factors are also at play, making it exceptionally difficult to project how much oil we’ll consume in the future. That’s why some major industry players are presenting multiple alternative models of […]

Peak Supermajors

18 Feb 2017   -, Peak Oil

Hey everybody, Last Sunday I put together a quick presentation on the most recent oil & gas production data for the “supermajors” (Shell, Total, BP, Chevron, ExxonMobil): Introduction Today I would like to introduce my “Peak Supermajors” project. The goal of this project is to answer the question “when will we reach peak oil” by studying the production and financial health of the world’s largest oil companies. Because oil is a finite resource, its daily global production will eventually reach a peak. By measuring when individual oil companies reach peak oil, I hope to bring us closer to answering the question “when will we reach peak oil?” I am beginning my project by analyzing the largest publicly-traded companies: the “ supermajors “. These 5 companies – BP, Chevron, ExxonMobil, Royal Dutch Shell and Total – produce nearly 20% of the world’s oil and gas. They are mostly descendants from […]

Exploring Hydrocarbon Depletion

17 Feb 2017   Peak Oil

Technological advances and learning-by-doing have made U.S. shale oil profitable even at $55/barrel. Just ten years ago shale oil was expensive. Global oil prices spiked to $135/barrel in 2008 but shale oil didn’t and couldn’t respond. Now, at only $55/barrel, U.S. oil producers are going all in, announcing billions of dollars of increased investment, particularly in Texas and North Dakota, and energy experts like Daniel Yergin are expecting U.S. production to increase this year by more than 500,000 barrels per day or about 6%. This remarkable transformation is a perfect example of learning-by-doing. Cost reductions in solar, wind, and batteries get a lot of attention. But fossil fuel producers also learn from experience, and the pace of learning in U.S. shale oil over the last couple of years has been impressive. Recent research by Thom Covert and others help us […]

Energy Companies Face Crude Reality: Better to Leave It in the Ground

17 Feb 2017   Peak Oil

A new era of low crude prices and stricter regulations on climate change is pushing energy companies and resource-rich governments to confront the possibility that some fossil-fuel resources are likely to be left in the ground. In a signal that the threat is growing more serious, Exxon Mobil Corp. is expected in the coming week to disclose that as much as 3.6 billion barrels of oil that it planned to produce in Canada in the next few…

End of the “Oilocene”: The Demise of the Global Oil Industry and of the Global Economic System as we know it.

1 Feb 2017   Peak Oil

In 1981 I was sitting on an eroded barren hillside in India, where less than 100 years previously there had been dense forest with tigers. It was now effectively a desert and I was watching villagers scavenging for twigs for fuelwood and pondering their future, thinking about rapidly increasing human population and equally rapid degradation of the global environment. I had recently devoured a copy of The Limits to Growth (LTG) published in 1972, and here it was playing out in front of me. Their Business as Usual (BAU) scenario showed that global economic growth would be over between 2010 -2020; and today 45 years later, that prediction is inexorably becoming true. Since 2008 any semblance of growth has been fuelled by astronomically greater quantities of debt; and all other indicators of overshoot are flashing red. One of the main factors limiting growth was regarded by the authors of […]

Global oil demand to grow into 2040s: BP outlook

26 Jan 2017   Peak Oil

Global oil demand will keep growing into the 2040s due to higher consumption of plastic goods even as the electric vehicle fleet expands rapidly and technology revolutionizes transport, BP said in its annual Energy Outlook on Wednesday. The forecast of sustained demand growth for the fossil fuel comes as other oil companies such as Royal Dutch Shell brace for demand to plateau by the early 2030s while countries gradually shift to less-polluting energy. In its industry benchmark report, BP forecasts a significant slowing of carbon emissions, which remain well in excess of goals set by governments to fight global warming. The British oil and gas company also said current recoverable global oil supplies of around 2.6 trillion barrels are sufficient to meet demand out to 2050 twice over. The abundance of oil could set the stage for […]

BP Sees a Future of Slowing Oil Demand Growth, Abundant Supplies

26 Jan 2017   Peak Oil

Oil Demand as a Test of Market’s Lower Limits Oil demand growth will slow and supplies will remain abundant in the coming decades, meaning producers in the Middle East, Russia and U.S. will continue to gain market share at the expense of higher-cost rivals, said BP Plc. Demand for oil will expand at an average of 0.7 percent a year over the next two decades, little more than half the rate in the preceding 20 years, BP said on Wednesday in its Energy Outlook 2035 report. By the early 2030s transport will cease to be the main driver of growth, a significant departure from the historical trend. “The most important source of growth in oil demand in the 2030s won’t be to power cars or trucks or planes, but rather used as an input into other products, such as plastics and […]

Why The World Economy Is Likely To Collapse

25 Jan 2017   Peak Oil

No difficult economic terms, no tough charts, just simple math. 1 – The worlds population of under 40 year olds (excluding Africa) has essentially peaked (chart below…bars represent 0-40yr/old population, dashed lines UN future estimates). What is interesting about the under 40 year old population is that they are responsible for about 97% of all pregnancies / births. It’s not impossible for 40+ year old women to have children, just statistically very rare (particularly outside the developed world). Ok, we’ve established the global under 40 population (excluding Africa) has essentially peaked…now we lay out the chart below that a shrinking population (above) isn’t replacing themselves. Chart below shows world fertility rates, again breaking world fertility (ex-Africa) from the African fertility rate. The world (ex-Africa) has fallen below the 2.1 births per female replacement level…and even Africa is rapidly slowing. A flat to shrinking child bearing population that is not […]

We used to worry about ‘peak oil’. Then the technological revolution happened

23 Jan 2017   Peak Oil

When you hear the words high tech, you probably imagine a smartphone, a driverless car, maybe even a spaceship. Having been in the oil and natural gas business for 36 years, I picture 3D seismic imaging that enables scientists to see miles below the seabed floor; the world’s biggest carbon sequestration project; and precision drilling equipment that enables us to bore holes more than 35,000 feet below sea level and hit a target the size of a baseball home plate. These technological achievements are what make the oil and natural gas business one of the world’s most high-tech industries, and they put us at the forefront of Industry 4.0 – the Fourth Industrial Revolution. Fuel for the energy economy Since the discovery of California’s Kern River oil field in the late 1800s, the industry has used technology to grow supplies and deliver affordable and reliable energy to the world. […]

Michael Lynch: Peak Oil Demand Is Deja Vu All Over Again

23 Jan 2017   Peak Oil

The current fashionable theme in energy is ‘peak oil demand’ and the accompanying possible stranding of fossil fuel resources, with the resulting damage to the equity value of producing companies. This post will discuss reasons to be wary, at least of some of the arguments. A subsequent post will discuss more realistic rationales—and signposts—towards peak oil demand. Unlike the earlier ‘peak oil’ scare, which I showed in my book to be without foundation, peak oil demand is theoretically sound, in the sense that there is nothing which requires the world to continue to use ever-increasing amounts of oil. Peak oil demand theorists sometimes cite the adage “the stone age didn’t end because we ran out of stones,” which represents the aspect of resource economics that higher prices or technological advances could lead to displacement of one resource by another. Of course, the rock business remains quite robust so the […]

BP predicts “peak oil” will hit between 2025 and 2040

20 Jan 2017   Peak Oil

Oil major BP has outline six main trends which could “shape the future” of energy. The company said energy transitions this year will look at a “dominant fuel” with gas growing faster than any other fossil fuel. It will see a sharp change in price coupled with such agreements like the 2015 Paris agreement which aims to keep the global temperature rise by below two degrees. Meanwhile, the firm said there is much more of a focus around peak oil from a demand side which will gradually start to decline. Broad consensus has suggested “peak oil” the peak oil window will be between the years of 2025 and 2040. However the report added there was still “considerable uncertainty” surrounding this. BP’s head of long-term planning, Dominic Emery, said the company was also preparing for a world where power comes increasingly from renewable sources. Both wind and solar power have […]

Peak Oil is Baaaack

18 Jan 2017   Peak Oil

A great report published last year by HSBC called: Global oil supply – Will mature field declines drive the next supply crunch They make a good many points frequently hammered on by Chris: Based on our supply model, we estimate that 81% of world liquids production is already in decline, excluding future redevelopments. However, on a more benign definition we estimate the figure at 64%, or 59mbd vs global supply (excluding biofuels/processing gains) of 91mbd. The remainder of output is accounted for by 1) new conventional fields or large fields in ramp-up or plateau, 2) natural gas liquids (~13.5mbd globally, where production is often associated with long-plateau gas output, typically for LNG), tight oil (~5mbd) and biofuels (~2.3mbd). If we assume 5-7%pa decline rates on a benign estimate of 59mbd of global post-peak output, the supply lost between 2016 and 2040 amounts to 41-48mbd. For context, this is […]

‘Significant’ oil supply-demand gap possible in three to four years: IEA’s Birol

14 Jan 2017   Oil Supply, Peak Oil

Oil price volatility is here to stay, notwithstanding recent producer pledges of output cuts aimed at calming the international market, the executive director of the International Energy Agency said Friday. “We are entering an era of more oil price volatility,” Fatih Birol said in a keynote address to delegates at the Atlantic Council Global Energy Forum Forum in Abu Dhabi. “We believe that this year, if there are no major oil projects starting, … in three to four years’ time we may see a significant supply-demand gap, with major consequences,” he elaborated. “This will not be filled by shale oil. This is why we may now be entering an era of greater oil volatility.” Birol stressed that the two consecutive years of declining global investment in oil development in 2015-2016 had no parallel in the history of the oil industry. Globally during the two years following the sharp decrease […]

Gail Tverberg: 2017 The Year When the World Economy Starts Coming Apart

13 Jan 2017   Peak Oil

Some people would argue that 2016 was the year that the world economy started to come apart, with the passage of Brexit and the election of Donald Trump. Whether or not the “coming apart” process started in 2016, in my opinion we are going to see many more steps in this direction in 2017. Let me explain a few of the things I see. [1] Many economies have collapsed in the past. The world economy is very close to the turning point where collapse starts in earnest. Shape Of Typical Figure 1 The history of previous civilizations rising and eventually collapsing is well documented.(See, for example, Secular Cycles .) To start a new cycle, a group of people would find a new way of doing things that allowed more food and energy production (for instance, they might add irrigation, or cut down trees for more land for agriculture). For […]

HSBC Global Oil Supply Report (September 2016)

13 Jan 2017   Peak Oil

HSBC produced an interesting report on oil production decline rates and their implications for the long-term oil supply outlook – Global oil supply: Will mature field declines drive the next supply crunch? . 1. The oil market may be oversupplied at present, but we see it returning to balance in 2017e2. By that stage, effective spare capacity could shrink to just 1% of global supply/demand of 96mbd, leaving the market far more susceptible to disruptions than has been the case in recent years 3. Oil demand is still growing by ~1mbd every year, and no central scenarios that we recently assessed see oil demand peaking before 2040 4. 81% of world liquids production is already in decline (excluding future redevelopments) 5. In our view a sensible range for average decline rate on post-peak production is 5-7%, equivalent to around 3-4.5mbd of lost production every year 6. By 2040, this […]

The Peak Oil President?

12 Jan 2017   Peak Oil

The frequency of Internet searches for the term “peak oil” has waned dramatically in recent years; now even the number of articles announcing the “death” of peak oil has dwindled, so universal is the assumption that the concept is completely debunked. Why bother beating a dead horse? With supreme irony, it could be within the next few years when the maximum-ever rate of world oil production is actually achieved, to be followed by terminal decline. It’s too early to make a definitive claim, but the evidence is starting to stack up. And the implications are mind-boggling. Last year’s average daily oil production rate will probably end up (when authoritative statistics are published) being about the same as 2015’s—roughly 80 million barrels per day, if we count crude oil only and exclude biofuels and natural gas liquids. And 2017’s output may well be down, due to the industry’s cutbacks on […]

Has U.S. Gasoline Demand Peaked?

6 Jan 2017   Peak Oil, USA

Several years of low gasoline prices have upended a decade-long shift towards more fuel efficient vehicles in the United States. For two years in a row, the U.S. auto industry broke new records for total sales, as an improving labor market and cheap gas induced more motorists to take to the roads. Car and trucks sales topped 17.5 million in 2016, the highest on record. At the same time, the industry is dealing with oversupply as automakers ramped up manufacturing capacity for sedans and lighter-vehicles in preceding years, which ran headlong into an era of rock bottom gasoline prices. Motorists have fallen back in love with gas guzzlers since 2014, taking advantage of the cheapest gasoline seen in years. So even as automakers are selling record levels of vehicles, they are having to offer steep discounts for sedans to unload inventory and are even temporarily shutting down production lines […]

Exxon’s 2040 Outlook: Fossil Fuels Aren’t Going Anywhere

2 Jan 2017   Peak Oil, USA

Gas, Nuclear, and Renewables Will Grow the Most, in that Order The global energy mix will not look that much different for oil and gas in 2040, according to Exxon Mobil’s (ticker: XOM) recently released 2017 Outlook for Energy: A View to 2040. (Click to enlarge) Source: Exxon 2017 Outlook for Energy Both the middle class and world GDP is expected to double in the next 15 years, accelerating demand for air conditioned homes, cars, and appliances such as refrigerators, washing machines, and smart phones. Non-OECD nations, particularly China and India, will experience the most economic growth, driven by urbanization. Oil is expected to remain the world’s primary energy source, driven by demand for transportation fuel and feedstock for the chemical industry. Plastics and other advanced materials provide advantages to manufacturers and consumers including energy efficiency gains. Natural gas is projected to grow the most of any energy type, […]

The 100 percent renewable energy future: The good news and the bad news

2 Jan 2017   Peak Oil

Authors Richard Heinberg and David Fridley in their recent book Our Renewable Future make the case for a society that runs on 100 percent renewable energy. But they don’t pull any punches, giving us both the good news and the bad news. Okay, here’s the good news: A 100 percent renewable energy society is well within our technical capability, and we’ve taken some important steps already. Now, here’s the bad news: The 100 percent renewable energy society is inevitable whether we plan for it or not. I know the bad news perhaps sounds like good news, but it’s not. The bad news may make it seem as if all we have to do is sit back while solar, wind, geothermal, hydroelectric, biomass and other forms of renewable energy are deployed at an ever faster pace. But, what the bad news really implies is that if this deployment process isn’t […]

Energy Sector Highlights Of 2016

31 Dec 2016   Peak Oil

A lot happened in the energy sector in 2016, with two major stories leading the way. Both the surprising election of Donald Trump to the presidency, and OPEC’s November announcement to curtail production vied for the top spot on my list, as they will both likely impact the energy markets for years to come. But in 2016 there were also huge wildfires that curtailed oil sands production in Canada, a major new pipeline protest that erupted in North Dakota, high profile bankruptcies in the coal sector, and several important stories on hydraulic fracturing in the U.S. Here is a list of what I believe were the year’s major energy stories. First the Top 5: 1. Donald Trump wins the presidency Had Hillary Clinton won, it wouldn’t have been the top story, because it would have meant a continuation of President Obama’s policies. But given the picks so far that […]

Peak Oil? Food For Thought

23 Dec 2016   Peak Oil

Some great statistics in this article . The theme: despite the current glut in oil, much of that due to the shale revolution, demand is likely to put stress on supply in the future . It appears, bottom line, IEA has simply moved the “peak oil” concern from 2020 to 2040. Some data points: 1998: IEA forecast peak oil in 2020 how far was the IEA off? IEA projected demand at 111 bopd by 202; in fact, current demand is struggling to hit 99 bopd today: IEA says CAPEX slumped in past two years due to price downturn; price downturn “pulled the rug out from under upstream spending and investment decisions”: IEA sees a potential oil supply “gap” of 16 million bopd by 2025 the gap of 16 million bopd by 2025 threatens new spike in oil prices global tight oil: 4.6 million bopd in 2015; will peak at […]

10 Energy Surprises In 2017

22 Dec 2016   Peak Oil

There’s less than two weeks left before the 2016 calendar gets tossed. So for the pundit community it’s time to publish the obligatory list of, “What to Watch For in in the New Year”. It’s pointless to list the obvious. For oil and gas, pundits know that things like OPEC compliance, U.S. rig counts, pipeline angst, and Chinese consumption are on a long list of standard items that are obligatory to parse from our cluttered news feeds. But what are the nascent items that could lead to unforgiving surprises? “When everyone looks to the right, it’s time to look left,” is an adage I always go by. So for 2017 here is a 10-item listicle that won’t be in the mainstream, but may be worthy of the left shoulder. 1. Sales of the Chevy Bolt – GM’s mass market, pure battery electric vehicle made its debut late this year. […]

Peak Oil is Dead. Peak Demand is Dead Ahead.

20 Dec 2016   Peak Oil

Today’s issue is a little different to usual. That’s mostly because of time constraints. I’m preparing my speech for the launch party for The Exponentialist this evening. It promises to be a great event. If you’re coming along (it’s by invite only I’m afraid) then I’ll see you in a few hours. But there’s another reason. It’s a unique opportunity for you to see some of our best research without taking out a subscription or reading a sales letter. Let me explain. Yesterday Eoin Treacy and I published our first ever Frontier Tech Investor forecast issue. It’s an extensive and in-depth look at the most important and potentially profitable tech stories of 2017. Things like: Why “peak demand” for oil is coming – and what that means for the markets. How to turn Saudi Arabia’s new $100 billion tech venture to your advantage. Mach 2.0: why super-speed travel is […]

Jean Laherrere on Proven Reserves

17 Dec 2016   Peak Oil

Jean Laherrere has posted the following charts and comments on Bakken and World oil reserves. EIA proved reserves on Bakken (ND +Montana) plus cumulative production have changed at end : -2012 3754 Mb -2013 5701 Mb -2014 7203 Mb -2015 6671 Mb As shown in this graph in red squares, together with HL ultimates, USGS estimates and cumulative production. ThisEIA CP+RR value (which is assumed to trend towards the oil ultimate) has increased sharply from 2012 to 2014 and has decreased in 2015 (this decrease may continue towards which value?). Proved reserves depend upon the oil price. Its variation indicates that its reliability is poor: No one knows how to estimate unconventional reserves as LTO because there is not enough historical series to verify if the method is right. EIA reports Bakken reserves only since 2011. Unconventional oil reserves are in unconventional reservoirs under unconventional trapping (no conventional water […]

Goodbye peak oil, hello peak demand

17 Dec 2016   Peak Oil

The threat of the world facing a declining supply of oil, so-called peak oil, has given way to a forecast that is calling forth its much more benign cousin: peak demand. The relatively subdued reaction to an agreement this week by the Organization of the Petroleum Exporting Countries to cut oil production beginning in January by 1.2 million barrels per day, or about 3 percent, has shown how far the world’s energy picture has changed since the days when OPEC decisions brought drastic results. While the announcement delivered an immediate modest increase in prices, it’s unclear whether members will hold to the agreement or that those price levels can be sustained. Thanks to improvements in oil extraction technology, rising prices simply open up more oil to be pumped, such as the shale oil deposits in the United States that have been idle because of the […]

Drowning the World in Oil

16 Dec 2016   Peak Oil

Scroll through Donald Trump’s campaign promises or listen to his speeches and you could easily conclude that his energy policy consists of little more than a wish list drawn up by the major fossil fuel companies: lift environmental restrictions on oil and natural gas extraction, build the Keystone XL and Dakota Access pipelines, open more federal lands to drilling, withdraw from the Paris climate agreement, kill Obama’s Clean Power Plan, revive the coal mining industry, and so on and so forth ad infinitum . In fact, many of his proposals have simply been lifted straight from the talking points of top energy industry officials and their lavishly financed allies in Congress. If, however, you take a closer look at this morass of pro-carbon proposals, an obvious, if as yet unnoted, contradiction quickly becomes apparent. Were all Trump’s policies to be enacted — and the appointment of the climate-change denier […]

Why the Peak Oil Movement Failed

16 Dec 2016   Peak Oil

As I glance back across the trajectory of this blog over the last ten and a half years, one change stands out. When I began blogging in May of 2006, peak oil—the imminent peaking of global production of conventional petroleum, to unpack that gnomic phrase a little—was the central theme of a large, vocal, and tolerably well organized movement. It had its own visible advocacy organizations, it had national and international conferences, it had a small but noticeable presence in the political sphere, and it showed every sign of making its presence felt in the broader conversation of our time. Today none of that is true. Of the three major peak oil organizations in the US, ASPO-USA—that’s the US branch of the Association for the Study of Peak Oil and Gas, for those who don’t happen to be fluent in acronym—is apparently moribund; Post Carbon Institute, while it still […]

Peak Oil – From Global Catastrophe to Global Opportunity

6 Dec 2016   Peak Oil

Modern economics is a matter of supply and demand. And when it comes to ‘peak oil’, it’s the difference between catastrophe and opportunity. Since the early 20th Century, scientists, experts, and economists have been predicting the manifestation of ‘peak oil’. For years, many people viewed ‘peak oil’ as a herald of global catastrophe, and the end of major economies. However, in recent years, the supply and demand situation for oil has turned in favour of supply. It now appears that peak oil demand is what organisations and countries need to be aware of. What’s more, some experts are predicting that this demand will happen sooner than expected. And global oil and gas organisations need to consider their next move in order to stay competitive. What Do We Mean By ‘Peak Oil’? ‘ Peak Oil ‘ describes a situation where global oil production hits its peak, then is in perpetual […]

Tumbling Down the Net Hubbert Cliff

6 Dec 2016   Peak Oil

I gave a mini presentation at a Griffith University “sustainable economy” seminar on 29 November 2016 As the themes were slanted towards “business opportunities”, I chose this title for my talk: “ Tiny House Communities: grassroots solutions for those with sufficient initiative to exit a collapsing industrial civilisation ”. In my pre-conference paper/abstract submission to the GCSE, I made it clear I was going to talk about much more than just tiny houses. Ultimately I spent only 5 minutes talking about tiny house communities and 15 minutes talking about our collapsing industrial civilisation. I focused especially on the sudden global energy descent we will soon be facing and tried to explain the key concepts with my “post peak oil” slides I received the usual denialism response I have come to expect from one individual in particular, a […]